Give Us Your Donors, or Else : California and New York Try to Chill Political Speech.
In New York, tax-exempt groups must apply for a license to solicit contributions, a process that has traditionally required the submission of their public IRS form 990. But Attorney General Eric Schneiderman has begun demanding that nonprofits also file their confidential list of donors found on IRS form “Schedule B.” The AG from Occupy Wall Street says a failure to do so makes an application “deficient” and exposes a group to fines or ban for violating the state’s law against unregistered solicitation.
Under New York’s Administrative Procedure Act, a change like this must go through a period of public comment, but Mr. Schneiderman acted by unilateral fiat. In May the 501(c)(4) Citizens United sued on grounds that the AG’s diktat violates its First Amendment and due process rights by imposing a rule without consultation or notice. The suit is pending in federal court.
Mr. Schneiderman says the information will be kept confidential, but New York state law has a robust bias in favor of freedom of information. How long before one of the AG’s liberal allies petitions the government to produce those files? The IRS recently paid $50,000 to settle a suit over the leak of donor information from the National Organization for Marriage to its political adversaries at the Human Rights Campaign.
In California, meanwhile, the Center for Competitive Politics is challenging the Golden State’s requirement that the group must cough up its donors if it wants a license to solicit contributions. The state says the power to seek donor information has been on the books for years, but the Center for Competitive Politics says the state’s demand this year is the first time the information had been required. This new arbitrary enforcement is happening amid the general liberal attack on conservative campaign donors.
California claims its wants disclosure to deter fraud, but state tax-law infringement doesn’t justify a rule that would cover donors nationwide. The Center for Competitive Politics is based in Virginia and draws donors from all over the country. The requirement means a Massachusetts contributor to a Virginia group would be disclosed to the California state AG.
California and New York are trying to end-run federal law that makes the donor names on Schedule B confidential. The Internal Revenue Code creates a specific avenue for state officials to petition Treasury if they have a good reason to see confidential donor information. Citizens United criticizes Democrats like Mr. Schneiderman, which makes his disclosure efforts an act of political self-interest during his re-election campaign. Let’s hope the courts overrule these attempts at chilling political speech.
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